CMOs Out in Force at JP Morgan

At the recent JP Morgan conference in San Francisco, I had the chance to talk to contract service providers, CRO presenters (Quintiles, Icon, Parexel and Charles River Laboratories) and a growing number of CMOs in attendance: Catalent, Parexel, Lonza, Albany Molecular Research (AMRI), Wuxi Pharmatech, Westpharma, and Samsung Biologics. The CEOs of Hospira and Baxter also presented, though their presentations focused on non-CMO businesses.

M&A involving CMOs and CDMOs was a big topic of discussion. Many of the presenting CMOs claimed to have active deal pipelines and said they expect to close multiple deals in the next couple of years. While we heard of several named CDMOs/CMOs supposedly “engaged in a process” (i.e., actively trying to sell themselves), there aren’t enough to satisfy the industry’s and investors’ apparent appetite, so valuations continue to escalate.

Executives from a number of Europe-focused CMOs were in attendance at the conference, though not as presenters. We met executives from Recipharm, Famar, Piramal, Klocke and Nextpharma, as well as from North American CMOs DPT, Therapure and Cook Pharmica. As we noted in a blog post last year, European CMOs very much want to get into the US market but lack the market knowledge and financial resources to do so. The JP Morgan event was an opportunity for them to increase their understanding of the US market and participate in some of the many partnering discussions there.

As usual, the activity at the JP Morgan conference itself was only the tip of the iceberg. While service providers are excited about immediate business opportunities, the big question on everyone’s mind is…

This article is reprinted from the January 2015 issue of Bio/Pharmaceutical Outsourcing Report. To learn more, click here.

Jim Miller is the founder and president of PharmSource Information Services, Inc. A preeminent expert in bio/pharmaceutical outsourcing, Jim established and presides over the industry’s principal resource for serious consumers of information on contract drug development and manufacturing, PharmSource STRATEGIC ADVANTAGE. He is editor and publisher of Bio/Pharmaceutical Outsourcing Report and Emerging Markets Outsourcing Report.